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European markets seesaw ahead of ECB decision
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DE30 with double top at 13,300 pts
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ECB rumoured to make small revisions to June's forecasts
European stock market indices launched today's trading higher but experienced a steep downward move after the start of the cash session. German DAX managed to recover to trade little changed on the day but the majority of blue chips indices from the Old Continent still remain below yesterday's closing levels. Polish and UK equities are top laggards.
ECB rate decision at 12:45 pm BST and Lagarde's presser at 1:30 pm BST are key events to watch today. It looks highly improbable that the Bank will decide to change settings of the monetary policy. However, a new set of macroeconomic forecasts will be released and markets are eager to know how the Bank's outlook has changed since June. Media reports claim that there will only be small changes compared to the last set of forecasts. ECB Chief Lagarde will explain the decision and answer journalists' questions during press conference.
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Source: xStation5
DE30 rallied yesterday along with US markets. However, the resistance at 13,300 pts turned out to be too tough for bulls to beat. Another test of this zone was made ahead of today's European cash open and it wasn't successful either. A double top was painted in the 13,300 pts area and a downward move followed. However, realization of the range of this pattern was put under question after the index struggled to break above the neckline at 13,220 pts. Market seems to be lacking conviction what hints at traders waiting for the ECB decision later in the day. The aforementioned 13,300 pts mark is a near-term resistance to watch and break above it could create a bullish bias. On the other hand, should ECB send a disappointing message for equities, like for example much worse economic forecasts, DE30 could look towards near-term support at 13,200 and 13,100 pts. Both of these levels are marked with Fibonacci retracements of last week's drop.
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DAX members at 10:21 am BST. Source: Bloomberg
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